World Vision Kenya Sacco entangled in internal fraud

A forensic audit conducted on the accounts of the Sacco also reveals massive weak internal controls that could have led to the loss of funds unabetted.

Documents seen by Citizen Digital indicate that Vision Sacco paid rebates to dormant accounts, overpaid the same to some accounts and did not disclose KRA taxes and penalties. These cost its members Ksh46.7 million.

The audit was conducted by SFAI a tax and legal consultancy firm based in Nairobi, Kenya.

“Various users in the system have super user permission. This means that these users can access all the modules in the system and have permission to add, edit/modify and delete any record,” the auditors say of the Sacco system.

During the period under the audit, SFAI says 85 members were underpaid rebate by Ksh.456,221. At the same time, the review also found that in some instances, the general member population was paid higher interests than the one approved during the Annual General Meeting (AGM).

“The change in the distribution of interest rate resulted in the Sacco overpaying interests to the members by over Ksh.16 million between 2017 and 2022,” reads the report.

Still, the Sacco overpaid rebates to some 472 members by Ksh3.8 million. This included an overpayment in 2017 of Ksh.667,327, Ksh.528,400 in 2018, Ksh.405, 621 in 2019, Ksh.2.2 million in 2020 and Ksh7,313 in 2021.

More startling from the report is also the payment of rebates by Vision Sacco to dormant accounts in 2018. The Sacco paid Ksh.1.4 million, while in 2019 and 2021, Ksh.79,942 and Ksh.1 million was paid to dormant or non-members.

While rebate payments are a boost to diligent and bonafide members of a Sacco, between 2017 and 2021, Vision Sacco denied some 562 members payment of the same. The audit reveals that a total of Ksh.17.6 million was denied by the members despite provisions in their books availed to cover everyone.

Citizen Digital reached out to the officials of the Sacco in an attempt to corroborate the damning audit report. The chairperson Millicent Okatch while acknowledging that fraud had indeed occurred insisted that she was only aware of Ksh.24 million lost. The board secretary Tobias Ogalo on his part denied "being a member of such a Sacco."

Later in the day, a statement from Vision Sacco, alleged that the matter was already in court and requested that the story is held from publication.

Established in 1980, Vision Sacco, initially catered specifically for employees of World Vision Kenya.

“We have since opened our common bond to include employees of World Vision Sudan, Somalia, World Vision International family, Vision Fund Staff, and East Africa Regional Office. Employees leaving the common bond are also allowed to maintain their membership,” it says on its website.

The latest forensic report was on Saturday, July 27, 2024, presented to members at a special general meeting drawing the wrath of members.

Apart from the financial mismanagement unearthed, the audit also pinpointed several poor accounting practices and a lack of authorisation journal entries among other weak internal processes.

“The online banking platform keeps records for the last one year. However, the Sacco does not download and archive the bulk upload statement from the banking platform,” the report notes

Further, the report revealed that the Sacco had been engaging interns in payment preparations exposing it to heightened risks… “as interns are not employees and may not be held accountable for fraudulent transactions,”

Currently, the report notes that the Sacco CEO Hudson Alubisia is not mandated by the board to be one of the online banking approvers/reviewers yet he is the chief accounting officer of the Sacco.